Hallenstein Glasson forecasts higher annual profit as sales grow 3.3 per cent

Group sales were $286.7 million in the 12 months to August 1. Photo / Sarah Ivey

Hallenstein Glassons expects its net profit after tax to be within the range of $27.7 million to $28.2m in the 12 months to August 1.

In a trading upate, the company said its sales growth was maintained throughout the second-half of the year for women's clothing retailer Glassons on both sides of the Tasman.

However its menswear division, Hallenstein Brothers, experienced a tougher season with sales and margins down on the previous year.

The NZX-listed retail company expects its full-year earnings to increase by about two per cent on the $27.4m annual earnings it posted a year earlier.

Hallenstein Glasson said its sales for the year were $286.7m, an increase of 3.3 per cent on the previous year. It will book $1.1m on the sale of a downtown Wellington property, the retailer said last week.

Group managing director Mary Devine said the group's balance sheet and projected future cash flow remained strong. Stock levels were also well managed, she said.

When taking over the reins in April, Devine was tasked with continuing to build digital customer engagement, controlling costs, and improving market share in New Zealand and Australia. E-commerce accounted for 14 per cent of group sales in the first half.

Like other apparel chains, Hallenstein Glasson has had to contend with increasingly strong competition from cheaper online rivals such as Asos and it ditched its Storm branded stores in 2018 to focus on its two namesake brands.

Shareclarity managing director Daniel Kieser said he suspected Hallenstein Glasson would out perform other listed retailers full-year earnings.

"The reporting season has only just started, so we should know in a couple of weeks whether Hallenstein Glassons has truly out-performed the retail sector. I suspect it may have," Kieser said.

"Glassons maintained its growth in the second-half, which was better than we expected and better than many other New Zealand and Australian retailers."

Discretionary clothing retailers have had a tough two to three years, Kieser said.

"Noni B and Myer, for example, have seen flat or negative revenue growth since 2014 (excluding acquisitions) yet Hallenstein Glassons has grown its revenues by more than 30 per cent over the same period."

Hallenstein Glasson shares are up 1.7 per cent at $5.39 and have climbed 29 per cent so far this year, outpacing a 21 per cent increase on the S&P/NZX All Index over the same period.

The company will post its full-year earnings on September 27.

- additional reporting BusinessDesk.